the company has two design options for its new line of crt tubes for cad workstations. The life cycle sales forecast for the crt is 100,000 units. Design option a has
a.90 probability of yielding 59 good crts per 100 and
a.10 probability of yielding 64 good crts per 100. This design will cost $1,000,000. Design option b has
a.80 probability of yielding 64 good units per 100 and
a.20 probability of yielding 59 good units per 100. This design will cost $1,350,000. Good or bad, each crt will cost $75. Each good crt will sell for $150. Bad crts are destroyed and have no salvage value. We ignore any disposal costs in this problem. Examine what happens to the decision if sarah king can increase yields from 59,000 to 64,000 by applying an expensive phosphorus to the screen at an added cost of $250,000. Prepare the modified decision tree.
Answers
the company has two design options for its new line of crt tubes for cad workstations. The life cycle sales forecast for the crt is 100,000 units. Design option a has
a.90 probability of yielding 59 good crts per 100 and
a.10 probability of yielding 64 good crts per 100. This design will cost $1,000,000. Design option b has
a.80 probability of yielding 64 good units per 100 and✔✔✔
a.20 probability of yielding 59 good units per 100. This design will cost $1,350,000. Good or bad, each crt will cost $75. Each good crt will sell for $150. Bad crts are destroyed and have no salvage value. We ignore any disposal costs in this problem. Examine what happens to the decision if sarah king can increase yields from 59,000 to 64,000 by applying an expensive phosphorus to the screen at an added cost of $250,000. Prepare the modified decision tree.
Answer:
By the real cost of $ 250,000 ........